Can the Baya Bar franchisor specifically enforce its rights to mediation?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
n Arbitration Association Commercial Mediation Rules. Such mediation shall take place in the then-current location of Franchisor's corporate headquarters. The costs and expenses of mediation, including compensation and expenses of the mediator (and except for the attorneys' fees incurred by either party), shall be borne by the parties equally. Franchisor may specifically enforce Franchisor's rights to mediation, as set forth herein.
10.3 Arbitration.
- 10.3.1 Except disputes not subject to alternative dispute resolution as set forth in Section 10.4, any dispute between Franchisor and Developer arising out of or relating to this Agreement, the Attachments hereto or any breach thereof, including any claim that this Agreement or any of its parts, is invalid, illegal or otherwise voidable or void, which has not been resolved in accordance with Sections 10.1 or 10.2, will be resolved by submission to the American Arbitration Association or its successor organization to be settled by a single arbitrator in accordance with the Commercial Arbitration Rules then in effect for such Association or successor organization.
- 10.3.2 All issues relating to arbitrability or the enforcement of the agreement to arbitrate contained in this Article 10 will be governed by the Federal Arbitration Act (9 U.S.C. §1 et seq.) and the federal common law of arbitration. All hearings and other proceedings will take place in Staten Island, New York, or the offices of the American Arbitration Association, or, if Franchisor so elects, in the county where the principal place of business of Developer is then located.
- 10.3.3 This arbitration provision is self-executing and will remain in full force and effect after expiration or termination of this Agreement. Any arbitration will be conducted on an individual, and not a class-wide or multiple plaintiffs, basis.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the franchisor can specifically enforce its rights to mediation. Before a Baya Bar developer (franchisee) can commence any legal action regarding a claim, controversy, or dispute, the developer must provide written notice to the franchisor detailing the nature of the issue. Following receipt of this notice, Baya Bar has thirty (30) days to exercise its option to submit the matter to non-binding mediation.
The mediation process for Baya Bar will be conducted through a mediator or mediators, adhering to the American Arbitration Association Commercial Mediation Rules. This mediation will occur at the location of Baya Bar's corporate headquarters at the time. The costs and expenses associated with the mediation, excluding attorneys' fees, will be equally shared between Baya Bar and the developer.
This clause ensures that Baya Bar has the option to pursue mediation as a means of resolving disputes before more costly and time-consuming legal actions are initiated. For a prospective Baya Bar franchisee, this means they may be required to participate in mediation at the franchisor's headquarters if the franchisor chooses this route. Franchisees should be aware of these dispute resolution steps and the associated costs, even though mediation costs (excluding attorney fees) are split equally.